Archive » United Kingdom » paying taxes in home country after leaving
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| hoof Junior Member Member # 5157 | Posted December 25, 2002 10:18 PM Does anyone know if you have to pay taxes in your home country after leaving? If so would this mean you would pay taxes in Britain and also pay taxes in the USA even if you never plan on going back there(which seem insane).If you have not payed them what could happen? Could you go to jail or would it effect renwing passport or getting british citizenship? Confused |
| sofastsoslow Junior Member Member # 6236 | Posted December 26, 2002 12:19 AM ok, this is the us policy on taxation. you are taxed on worldwide basis. so any income you earn anywhere is taxed. us has tax treaties with various countries so you are can deduct the taxed earned abroad from these countries from your us taxes. so if tax rates are higher abroad, you don't have to pay us taxes if thes countries have tax treaties with us. Also there is a $70000 exemption for earnings abroad. Which means you don't have to pay taxes if you earned less than $70000 abroad. Mind you you still have to fill in the tax form regardless. Now if you renounce your us citizenship then i guess you are scott free. |
| Joseph Member Member # 184 | Posted December 26, 2002 03:21 PM Hoof, A few additional points: Even renouncing US citizenship will not necessarily get you off the hook. Since the mid-eighties there has been in effect Expatriation Tax charged for the 10 years after renunciation of citizenship if the motive for renunciation was to avoid paying US taxes. Renewal of US passport depends on submitting your SSN and if taxes or returns are in arrears, it could cause problems. Acquisition of UK citizenship depends on having "good character." As I noted before in your previous string, the Home Office check payment of income taxes as one of the measures. Given that UK and US tax authorities share information, this could cause problems if US taxes are not paid. As sofastsoslow points out, cost of US citizenship is not so high in the UK because $78K exemption ($80K next year) and Foreign Tax Credit will make your US taxes negligible. P.S. If you want to avoid paying taxes, the UK is not really the place to be! Joseph |
| hoof Junior Member Member # 5157 | Posted December 26, 2002 04:35 PM Thanks for the advice but I would like to get one thing straight. There is no way I am in the UK to avoid paying US taxes. I am living here because I simply do not want to live anywhere in the USA ever again-period. And the UK is far far more expensive and has much higher taxes in the USA. But I do not have much experience with leaving a country as I never did it before. So I am just questioning the fact do I have to pay taxes. OK so I have been here for over 2 years and I have not paid any USA taxes as I did not think I had to.I Would liek toe get my UK citizenship and renounce my USA citizenship because I never want to live there again. Could anyone tell me who I should contact about paying taxes in the USA? Am I in trouble? |
| hoof Junior Member Member # 5157 | Posted December 26, 2002 04:44 PM OK OK re-reading this it looks like I dont have to pay taxe but I still have to fill out a tax form. It also think I earned more that 70,000 in dollars last year in the UK. DOes this mean I have to pay USA taxes on it as well as UK taxes? Does UK have a tax treaty with USA? Where do I get all this information at? CAn anyone give me there personal experinece of how they handle paying taxes after they leave a country or what someone in my situation should do? Thanks! |
| hoof Junior Member Member # 5157 | Posted December 26, 2002 04:57 PM Hello OK one more question. I have filled out the forms to pay UK taxes here in the UK. Is this all I have to do? Or do I have to fill out forms in the USA or something. Any good web sites would be appreciated as this is very stressful. Thaksn again |
| saraliz Junior Member Member # 5739 | Posted December 26, 2002 07:17 PM You will have to fill out a US tax return. The logical place to start looking for information would be the IRS website (www.irs.gov). Check out: http://www.irs.gov/formspubs/page/0,,id=12607,00.html - it's a link to tax information for US citizens abroad, and gives a comprehensive overview of what your responsibilities are. |
| hoof Junior Member Member # 5157 | Posted December 26, 2002 08:36 PM Thanks Sar, I have read the information and think this may be for people who work abroad and plan on going back to the USA, as other information points me to that I will not need to fill US tax forms out since I am planning on stayin in the UK indefinatley. I am in UK on the HSMP program, and thus never plan on going back to the USA. In any case if it was true that someone who would leave a country permantly would have to still fill out tax returns, then it would mean that every single year fro the rest of my life I would have to fill out tax returns in the UK then also do it in the USA-even though I never plan on living there again and thus will not use anything that a US tax payer would use. I must admit I am still a littel concerned about what I should be doing so I might have to dish out yet even more money to get proffessional advice on this. CHeers |
| marka Member Member # 1907 | Posted December 27, 2002 01:10 AM hoof, I think there is very much the US goverment can do to you if you live abroad and don't file your taxes. The only possible recouses the US has is not renewing your passport, taking any property you have in the US or placing you in detention if you try to re-enter the US. Furthermore, they can give you a bad reference should the UK or any other nation ask(as part of a naturalisation procedure perhaps?) Also I presume if you loose your passport they might not be too quick in issuing you a replacement if the IRS has given you a red-code. While you have US citizenship and only US citizenship I would suggest being on good terms with US tax and other authorities. It will come in handy for passport renewal, consular help and other useful things. If you loose your passport you will need the american councilate to give you another one before you can do anything else. Once you accure UK nationality(through the HSMP program and ILR) then you can make a decision as to what to do with your US passport. But until then I would suggest paying your taxes. Because of the $80K exclusion and the tax treaty it won't be much if anything at all. Just my opinion. Mark |
| Joseph Member Member # 184 | Posted December 27, 2002 01:33 AM Hoof, I agree with Marka. The best information for US citizens abroad is detailed in Publication 54 in the IRS website: US taxes are not a major deal when living in the UK because the taxes here are higher than the US so your US taxes are likely to be nil. On the other hand, if you lived in a low tax place, then being a US citizen would really be a disadvantage. Don't say never. Until you successfully naturalize in the UK, you can't be sure that you won't need your US citizenship. Joseph |
| Elisa Member Member # 2487 | Posted December 27, 2002 06:05 AM You're assuming that your HSMP will be renewed, what if it isn't for some reason? What if they run a full check on you once you try for citizenship? I wouldn't mess with the IRS, I've seen what they can do a persons credit rating over a simple error. Since you're make loads of money why don't go see a lawyer that specializes in this sort of thing and they can advise you. There are always legal ways to lower your taxes, such as short term investments, RRSP's, etc. |
| hoof Junior Member Member # 5157 | Posted December 27, 2002 07:30 PM OK here is a good web site to help expats with filing taxes abroad http://www.globaltaxhelp.com Again I would like to point out that I am just looking to do the right thing and not trying to avoid any responsabilities.I mean would anybody here relize that you should send your tax forms into your home country if you leave and never plan on going back? |
| Elisa Member Member # 2487 | Posted December 28, 2002 02:24 AM No hoof you are right, most of us think we can just leave our country of birth and cut all ties. But it seems you can't really, they always have a hold on you somehow. Especially when it comes to taxes, it seems they will squeeze every cent out of you that they can for as long as they can |
| Bobblewait Member Member # 6527 | Posted December 28, 2002 08:19 AM Gonads |
| hoof Junior Member Member # 5157 | Posted December 28, 2002 04:48 PM well all in all I dont really owe any taxes besides this year anyway, so I will fill it out them |
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